The protein tyrosine phosphatases (PTPs) have emerged as critical players in diverse cellular functions. The focus of this review is the leukocyte common antigen-related (LAR) subfamily of receptor PTPs (RPTPs). This subfamily is composed of three vertebrate homologs, LAR, RPTP-sigma, and RPTP-delta, as well as few invertebrates orthologs such as Dlar. LAR-RPTPs have a predominant function in nervous system development that is conserved throughout evolution. Proteolytic cleavage of LAR-RPTP proproteins results in the noncovalent association of an extracellular domain resembling cell adhesion molecules and intracellular tandem PTPs domains, which is likely regulated via dimerization. Their receptor-like structures allow them to sense the extracellular environment and transduce signals intracellularly via their cytosolic PTP domains. Although many interacting partners of the LAR-RPTPs have been identified and suggest a role for the LAR-RPTPs in actin remodeling, very little is known about the mechanisms of action of RPTPs. LAR-RPTPs recently raised a lot of interest when they were shown to regulate neurite growth and nerve regeneration in transgenic animal models. In addition, LAR-RPTPs have also been implicated in metabolic regulation and cancer. This RPTP subfamily is likely to become important as drug targets in these various human pathologies, but further understanding of their complex signal transduction cascades will be required.